Pay channel broadcasters like ESPN, Star, Zee, Sun and others will continue to earn higher revenue on the direct-to-home (DTH) platform than suggested by the sector regulator. This happened after the Telecom Disputes Settlement Appellate Tribunal (TDSAT) set aside the July tariff order of Trai that had reduced the pay ceiling for pay channels on the DTH platforms from 50% to 35% of the tariff on cable homes (non-CAS) despite opposition from the broadcasters.
As reported first by FE in August, most pay channels had dragged Trai to TDSAT challenging the 35% formula indicated in Trai’s tariff order in July. Broadcasters like Sun, ESPN, Zee, Star and others had termed Trai’s formula as ?misconceived? and against the basic premise of introducing addressability in the cable sector.
Now as a result of the TDSAT?s order the pay channel broadcasters will continue to get more revenue from the six private direct-to-home (DTH) operators and in line with the earlier formula also fixed by TDSAT in 2006.
This issue gains significance because DTH has emerged as the fastest growing digital television distribution platform growing at 55-60% annually and adding 10 million subscribers. Despite this fact, the broadcasters can not earn more in subscription revenue from DTH. This is because according to the laid down laws, broadcasters ability to earn revenue from the consumers on the digital and addressable DTH platform is directly linked and limited to half the tariffs mandated in the analogue cable homes.
However, Trai, after consultations with broadcasters and DTH operators had lowered it even further. Trai will now have to re-work on the tariff formula on DTH platform in consultation with the broadcasters.
?The 35% formula for addressable platforms like DTH is arbitrary, discriminatory unreasonable and unjustified without there being any basis or material for Trai to come to such conclusion,? broadcasters had said in their petition filed before the TDSAT. ?By stipulating the 35% ceiling of non-CAS rates, Trai had brought the subscription revenue from addressable system to the level of the non-CAS area, thereby not only legitimising the under-declarations prevalent in non-CAS areas, but also extended the same illegality to addressable system,? a leading broadcaster said.
In 2009, DTH operators added 10 million subscribers while this year already 12 million subscribers have been addded taking the total DTH subscriber base to 31 million mark now. Compared to this, the analogue cable homes continue to hover around 80-85 million recording virtually no growth in the last couple of years.